Are you looking for an app that gives you the freedom to maximize your investments?
Maybe you want an app that will help you put your money in investments that resonate with personal interests?
Then, you might consider giving Stash a try.
Let’s explore what Stash has to offer, so you can see if its the best solution for your investment needs.
Stash App Overview
Launched in 2015, Stash was developed with the aim of making the process of finding and choosing investments easy for beginning investors.
It allows you to invest in exchange-traded funds (ETFs) and individual stocks but isn’t a robo-advisor.
Stash doesn’t manage your account directly. Instead, it is designed to guide you through the process of building your investment portfolio.
Stash can recommend investment options based on your goals, tolerance to risk, and personal values, but it’s up to you to make the final decision on what to invest in.
With Stash, you can start investing with $5. The management fee is $1 per month for account balances ranging for $0 to $5,000. Account balances of at least $5,000 will pay .25 percent management fee per year.
Retirement accounts with balances below $5,000 will pay $2 monthly management fee. If you are aged below 25, you won’t have to pay any fee on retirement accounts.
Who Should Use Stash?
If you fall in any of the following groups, then Stash would be your ideal investing app:
- Passive investors: Stash takes care of the day-to-day investing, freeing you up from having to play too active a role in trading.
- Beginning investors: If you’re a novice, you can benefit from Stash’s simple platform, tools, and informational resources.
- Investors with limited funds: Stash allows for a $5 minimum initial investment, opening the doors to investing for people who are limited by finances.
- Impact investors: With Stash, you can choose where to invest based on themes or issues that interest you.
How Stash Works
You must be at least 18 years and a U.S. resident to be able to open a Stash account.
Opening a Stash account is quite easy. In fact, it should take you only a few minutes to get started.
Types of Accounts
Once you get a Stash account, you’ll need to open a taxable investment account or one of the two tax-advantaged retirement accounts, namely:
- Traditional individual retirement account (IRA).
- Roth IRA
Stash will help you invest the cash you deposit into these accounts. Remember that Stash won’t invest your funds for you.
It won’t adjust your portfolio to ensure it is balanced, either. But it will help you to construct your portfolio by making things easy when it comes to choosing what to invest in.
Some of the investing options Stash gives you include:
- Selecting from at least 40 handpicked ETFs. ETFs give you exposure to a wide range of assets, which can come handy when you want to diversify your portfolio.
- Investing fractional stock shares in corporations such as Amazon and Apple. Currently, Stash allows you to purchase stock in a limited number of corporations.
- Smart-Save is of the most remarkable features of Stash. This feature will monitor your spending and transfer any excess cash automatically to your account.
This functionality is optional. It allows you to stop money transfer when your bank balance drops to a specific level.
You also have the option to set the aggressiveness of Smart-Save when it comes to how much it transfers from your account.
Stash Management Fees and Minimums
You need to have at least $5 to have a Stash account. Likewise, you need at least $5 to start investing with Stash—that makes Stash accessible to virtually everyone.
Stash management fees are also pretty affordable. You won’t pay a dime for the first month. Afterward, you will be paying $1 management fee every month. You won’t be paying any commissions or other hidden charges.
When your account balance goes above $5,000, you will start paying an annual fee of .25 percent of investments under management.
If your investments are worth $6,000, for example, you’ll need to pay $15 per year.
It is worth noting, however, that Stash is much more cost-friendly when you have an extensive portfolio.
That’s because the $1 per month fee can account for a significant percentage of your investments if you have a low account balance. Otherwise, it is one of the most competitive prices you can get on the financial market today.
Advantages and Disadvantages of Stash
- Ease of use: It is ideal for beginner investors, making the investing process easy and straightforward
- Low minimum: You don’t need to raise tons of money to start investing. There’s no minimum to open an account, and you need just $5 to start investing.
- Recommendations: Stash recommends investment options based on your income and goals, allowing you to attain easy, personalized outcomes.
- Options: Stash gives you a decent number of options to start with, thanks to the over 30 ETFs to choose from.
- Impact: The app has tools to help you see the impact your investments and savings might have on your future so that you can change your habits accordingly.
- Resources: Stash offers tons of educational materials, designed according to your income, questionnaire responses, and investments. You’ll find these materials valuable if you are a beginner. It will also save you time since you don’t need to venture outside the app to look for important information.
- Impact: Stash allows you to invest in what you are most interested in. It helps you pick investments that resonate with your passion and personal values. If you want to invest in companies that promote gender diversity, for example, Stash will give you an easy time finding those companies.
- Self-managed: Stash does not manage your funds for you. That means you may need to acquire a real robo-advisor or hire a financial expert as your portfolio grows.
- Fees: The $1 management fee may sound cheap, but it is actually higher than many robo-advisors. This is especially true if your account balance is consistently low.
- Limitations: While Stash offers a wider selection of ETFs compared to its close competitors, its options are still limited because it doesn’t provide other investment options like mutual funds, futures, and options. Moreover, you can always research most of these ETFs by yourself and even buy them on a non-commission basis.
- Commitment: You will need to enter your personal details simply to get a result. If you want to see any recommendations from Stash, you will have to link up your bank account and agree to make repeat contributions every month.
It is possible to opt out of the agreement after you are done signing up. However, it usually is not a pleasant experience when you are required to provide bank information before you even complete the registration process.
If you are new to the world of investing and need to be guided through the process in an efficient and easy to understand manner, then Stash could be your ideal investment app.
With as little as $5, you can start investing. The best thing is that Stash allows you to select funds that are consistent with your interests.
However, as your investments grow, Stash may not be of great help because it doesn’t manage your funds for you.
So, you may need to invest with a more sophisticated robo-advisor or a professional financial advisor in the future.